Anticipated

The draft version of Rep. Joe Barton’s (R-TX) much-anticipatedretail electric legislation that was unveiled last week appears tobe most notable for the two things that were missing from it – arenewable-fuel mandate and a date-certain.

Speculation around the much anticipated storage report continuedto run rampant yesterday on trading floors across the natural gasindustry and that coupled with steady fund buying was enough tolift the futures market higher for the third day in a row. TheSeptember contract raced off to a fast start, but was unable toretest the $2.72 high set last Thursday. After notching a $2.66high trade around 10:30 EST the prompt month was left to chopsideways before eventually settling up 4.4 cents at $2.642.

Prices failed to fake out anyone Wednesday. With Tuesday’s latesoftness on the Nymex screen carrying over into Wednesday and thesubsidence of “the big bakeoff” in the Northeast, as one producercalled it, it didn’t take a crystal ball to make a bear marketcall. The larger declines on either side of a dime tended tocluster in the Gulf Coast, Appalachian, Northeast, Midcontinent andMidwest markets, while western drops generally were around a nickelor less. Unlike the late screen-related fallbacks reported Tuesday,traders said a number of points saw slight upticks in late dealsWednesday.

Exxon and Mobil took an eagerly anticipated step towardcompleting their merger yesterday as shareholders for bothcompanies approved the combination. Mobil received 98% shareholderapproval for the deal and Exxon received 99%. The votes were heldat separate hotels in Dallas, TX.

The anticipated election of Rep. Robert Livingston (R-LA) as thenext speaker of the House of Representatives could be very good forthe natural gas and oil industries.

In preparing to meet an anticipated 30-32 Tcf market in the next10-12 years, the gas industry should build only the amount ofpipeline capacity that’s needed when it’s needed – no more, noless, said an executive with ANR Pipeline.

In another much-anticipated decision, FERC yesterday proposed anexpedited complaint process that would apply uniformly to all ofthe energy sectors that it regulates – natural gas pipelines,electric utilities, oil pipelines and hydroelectric concerns. Thecomplaint proposal, which was outlined in a notice of proposedrulemaking (NOPR), represented an “amalgam” of the best proposalsof the Interstate Natural Gas Association of America, the PipelineCustomer Coalition and the Electric Industry Dispute ResolutionWorking Group, said Chairman James Hoecker.

It took a while longer than many traders had counted on, but thewidely expected recovery from last Thursday’s falling pricesfinally came to pass Wednesday. The upticks were broadly based butdiverse, ranging from 2-5 cents at many Gulf Coast and Midcontinentpoints to 10-15 cents in the California market.

The anticipated big price drops for the Memorial Day weekendshowed up on schedule Friday everywhere except in Canada. Declinesof a dime or more were common at nearly all points. Only theAppalachian pipes and a few in Louisiana managed to hang on over $2in the producing areas. Chicago and Michigan citygates fell about15 cents into the mid to high $2.00s, and Northeast citygates weredown about a dime into the low to mid $2.20s.